The UAE continues to evolve as a world-class destination for both career growth and long-term living. With initiatives like long-term visas and freehold property ownership readily available to expatriates, the prospect of building a secure financial future, including retirement, has never been more achievable.
In line with this progressive shift, the UAE Government introduced a landmark update in late 2023: a voluntary alternative end of service benefits (EOSB) scheme. This forward-thinking initiative, jointly regulated by the Securities and Commodities Authority (SCA) and the Ministry of Human Resources and Emiratization (MOHRE), is set to reshape how both employers and employees approach workplace savings and financial security.
A Smarter Approach to Financial Security
The new scheme offers employees more than just peace of mind. Much like the DIFC Employee Workplace Savings (DEWS) Plan, it empowers workers to take a more active role in managing their own end-of-service benefits, while giving employers a future-proof way to strengthen employee retention and engagement.
Under the traditional gratuity system, end of service benefits were often just a contractual line item, rarely offering employees visibility or flexibility. Today, with the introduction of company-sponsored workplace savings plans, employees can monitor their investments, make additional voluntary contributions, and tailor their financial strategies to suit their individual goals therefore adding real value to their employment package.
A Strategic Tool for Attracting and Retaining Talent
This modernised approach to employee benefits (opens a new window) could not be more timely. A recent Zurich survey revealed that nearly one-third (31%) of employees across the GCC want access to a workplace savings plan, highlighting growing expectations around financial well-being and security.
For employers, offering a robust workplace savings plan is fast becoming a key differentiator in attracting top talent and more importantly, retaining them. It’s a win-win approach that aligns business needs with employee aspirations.
Financial Advantages for Employers
Beyond talent retention, the new system offers substantial financial benefits for businesses. Under the old gratuity model, employers faced the challenge of managing unpredictable, unfunded liabilities on their balance sheets. The new workplace savings approach allows for more accurate forecasting and cost management.
Additionally, monthly contributions made on behalf of employees may qualify for corporate tax relief in the UAE, adding a direct financial incentive to the package.
Making the Right Choice: What Employers Need to Consider
With a variety of approved workplace savings providers now available, employers have a valuable opportunity to shape a plan that fits both their business goals and their employees’ needs.
The first step? Define the purpose and scope of the plan. Consider involving employees in the discussion to ensure the chosen solution meets their expectations. Once the priorities are clear, employers can work with independent, professional advisors to compare providers, assess features, and identify the best fit.
Long-Term Success Through Ongoing Management
Partnering with a skilled advisor does not just simplify the initial setup, it ensures long-term success. Advisors can monitor plan governance, performance and help adapt the plan as the organisation evolves. For multinational businesses or those operating across the GCC, advisors can also help create a consistent, compliant multi regional strategy.
Planning Today for Tomorrow’s Opportunities
While the current scheme is voluntary, it’s widely expected that a mandatory workplace savings system will be introduced in the UAE over the coming years. Forward-looking organisations would be wise to act now, ensuring a smooth transition and gaining an immediate competitive edge in the talent market.
With expert guidance and a thoughtful approach, the new UAE workplace savings framework offers employers the chance to boost their reputation, enhance employee loyalty, and improve financial planning, both for their workforce and their business.
The result? Stronger employee engagement, a more predictable financial model, and a future-ready organization.
